German Cartel Office Clears KMW-Nexter Merger

The German Federal Cartel Office, Bundeskartellamt today has cleared the merger of Wegmann and the French GIAT Industries.

The companies plan to introduce a new joint venture by merging its two subsidiaries Krauss-Maffei Wegmann (KMW) and Nexter Systems in constituting 50:50 stakes. The new venture will concentrate on different areas of development and production of armored wheeled and tracked vehicles and reconstruction, modernization and overhauling of armored military vehicles.

"In the Merger, it is checked whether effective competition would be significantly impeded in the markets concerned. The investigations have shown that this is not to be expected in the present case, particularly in the construction of heavy battle tanks. Security aspects are not the subject of merger control proceedings the Bundeskartellamt, but part of a foreign trade law test which is carried out by the Federal Ministry for Economic Affairs and Energy and is not yet complete,” Andreas Mundt, President of the Bundeskartellamt said in a statement.

Both KMW and Nexter build heavy armored main battle tanks. As per the investigation, the merger will have no adverse effects on the procurement of both German and French armed forces. This is a special invitation to tender market, in which even security-policy concerns in the procurement play a role.